We own 2 % shares of a new company and work for it as well. It is now a c corp and the owner wants to change it to an s corp. Other than the taxes situation what are the advantages and disadvantages
How does a s corporation benifit a 2% shareholder and employee vs a c corporation?
You get your paycheck, and any dividends the company pays. The S-Corp eliminates double taxation, as they don't have to pay federal income taxes, but you still do.
With a non-S-Corp, the corp pays income taxes, then pays you, and you pay your taxes also. If the company pays more taxes, it has less money to pay you salary and dividends.
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